<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 33-45291
--------
Winthrop Miami Associates Limited Partnership
---------------------------------------------
(Exact name of small business issuer as specified in
its charter)
Delaware 04-3131735
------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer Id. No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142
------------------------------- -------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
--------------
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ______
-------
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
PART I - FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements
(In Thousands, Except Unit Data) For the Three Month Period For the Six Month Period
Ended June 30 Ended June 30
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Rental income $ 3,032 $ 2,845 $ 6,047 $ 5,695
Operating expense and tax escalation
reimbursements ............................... 141 145 281 222
Interest income................................. 74 138 163 271
-------- --------- -------- --------
Total Revenues.............................. 3,247 3,128 6,491 6,188
-------- --------- -------- --------
EXPENSES:
Repairs and maintenance......................... 195 164 394 351
Utilities....................................... 273 262 585 539
Payroll......................................... 149 146 297 293
Security ....................................... 111 104 208 198
Lease costs and rental expense.................. 234 214 456 462
Insurance....................................... 41 36 82 72
Real estate and other taxes..................... 460 349 911 801
Management fees ................................ 174 149 324 291
General and administrative...................... 86 77 157 185
Advertising..................................... 37 38 71 62
Cleaning........................................ 147 136 285 266
Interest expense................................ 1,215 1,240 2,430 2,390
Depreciation and amortization................... 778 658 1,497 1,420
-------- --------- -------- --------
Total Expenses............................... 3,900 3,573 7,697 7,330
-------- --------- -------- --------
Net Operating Loss................................. (653) (445) (1,206) (1,142)
Gain due to refinancing......................... - 1,895 - 1,895
-------- --------- -------- --------
Net Income (loss) before minority interest......... (653) 1,450 (1,206) 753
Minority interest in (income) loss................. 76 (180) 143 (92)
-------- --------- -------- --------
Net Income (loss).................................. $ (577) $ 1,270 $(1,063) $ 661
========= ========= ======== ========
NET INCOME (LOSS) ALLOCATED TO
GENERAL PARTNER................................. $ (58) $ 127 $ (106) $ 66
========= ========= ======== ========
NET INCOME (LOSS) ALLOCATED TO
INVESTOR LIMITED PARTNERS....................... $ (519) $ 1,143 $ (957) $ 595
========= ========= ======== ========
Net Income (Loss) Per Investor
Limited Partner Unit............................ $ (1,922) $ 4,233 $(3,544) $ 2,203
========= ========= ======== ========
Number of Investor Limited Partner
Units Outstanding.............................. 270 270 270 270
========= ========= ======== ========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
FOR JUNE 30, 1998 AND DECEMBER 31, 1997
- --------------------------------------------------------------------------------
ASSETS (Amounts in Thousands)
<TABLE>
<CAPTION>
1998 1997
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
Building and improvements, net of accumulated
depreciation of $12,843 and $12,240, respectively.................... $ 47,685 $ 47,675
Tenant receivables, net of allowance for doubtful accounts of
$20 and $20, respectively.............................................. 326 327
Prepaid expenses and other assets...................................... 167 263
Deferred rents receivable.............................................. 4,359 4,254
Deferred costs, net.................................................... 1,448 1,462
Cash and cash equivalents ............................................. 1,576 2,708
Other restricted cash and cash equivalents ............................ 5,528 5,671
-------- --------
TOTAL ASSETS........................................................ $ 61,089 $ 62,360
========= ========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Permanent Loan......................................................... $ 51,158 $ 51,158
Prepaid tenant rent.................................................... 456 264
Accounts payable and accrued liabilities............................... 1,193 877
Security deposits...................................................... 348 298
-------- --------
TOTAL LIABILITIES................................................... 53,155 52,597
Commitments
Minority interest...................................................... 736 957
-------- --------
Partners' capital (deficit):
General Partner........................................................ (4,193) (4,082)
Limited Partners - 270 units issued and outstanding.................... 11,391 12,888
-------- --------
TOTAL PARTNERS' CAPITAL............................................. 7,198 8,806
-------- --------
TOTAL LIABILITIES AND PARTNERS' CAPITAL............................. $ 61,089 $ 62,360
========= ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
- --------------------------------------------------------------------------------
(Amounts in Thousands)
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
-------- ------- -----
<S> <C> <C> <C>
Balance, December 31, 1997....................... $ 12,888 $(4,082) $ 8,806
Net income....................................... (957) (106) (1,063)
Distributions.................................... (540) (5) (545)
-------- --------- -------
Balance, June 30, 1998........................... $ 11,391 $ (4,193) $ 7,198
======== ========= =======
Balance, December 31, 1996 ...................... $16,086 $(4,000) $12,086
Distribution Payable............................. (2,700) (27) (2,727)
Net Income....................................... 595 66 661
-------- --------- -------
Balance, June 30, 1997........................... $13,981 $(3,961) $10,020
======== ========= =======
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
- --------------------------------------------------------------------------------
(Amounts in Thousands)
<TABLE>
<CAPTION>
1998 1997
-------- ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................................... $ (1,063) $ 661
Minority interest in income (loss)................................... (143) 92
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization..................................... 1,497 1,420
Bad debt recovery ................................................ - (5)
Changes in operating assets and liabilities:
Decrease in tenant and other receivables........................ 1 113
Decrease in prepaid expenses and other assets................... 96 120
Increase in deferred rents receivable........................... (105) (382)
Increase in accounts payable, accrued liabilities
and security deposits......................................... 366 542
Decrease in due to affiliates................................... - (56)
Increase in prepaid tenant rent................................. 192 71
Decrease in accrued interest payable............................ - (1,615)
--------- ----------
Net cash provided by operating activities............................ 841 961
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in restricted cash and cash equivalents ......... 143 (4,409)
Expenditures for building and improvements........................... (1,337) (327)
Deferred costs....................................................... (156) (203)
--------- ----------
Net cash used in investing activities................................ (1,350) (4,939)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to partners....................................... (545) -
Net withdrawals from mortgage escrow................................. - 1,379
Distributions paid to minority partner............................... (78) (174)
Minority interest capital contributions received..................... - 61
--------- ----------
Net cash provided by financing activities............................ (623) 1,266
--------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.................... (1,132) (2,712)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....................... 2,708 8,423
--------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD............................. $ 1,576 $ 5,711
========= ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest............................................... $ 2,430 $ 2,110
========= ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Accrued distributions to partners.................................... $ - $ 2,727
========= ==========
Gain from refinancing (see note 5)................................... $ - $ 1,895
========= ==========
Retirement of fully depreciated assets............................... $ 1,490 $ -
========= ==========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. General
The accompanying consolidated financial statements, footnotes and
discussions of Winthrop Miami Associates Limited Partnership (the
"Partnership") should be read in conjunction with the financial
statements, related footnotes and discussions contained in the
Partnership's Annual Report on form 10-KSB for the year ended December
31, 1997.
The financial information contained herein is unaudited. In the opinion
of management, all adjustments necessary for a fair presentation of
such financial information have been included. All adjustments are of a
normal recurring nature. Certain amounts have been reclassified to
conform to the June 30, 1998 presentation. The balance sheet at
December 31, 1997 was derived from audited financial statements at such
date.
The results of operations for the six months ended June 30, 1998 and
1997 are not necessarily indicative of the results to be expected for
the full year.
2. Related Party Transactions
Management fees are paid to an affiliate of the General Partner and are
based on 5% of cash receipts. Fees of $324,000 and $291,000 were earned
by affiliates during the periods ending June 30, 1998 and June 30,
1997, respectively.
The Operating Partnerships owed an affiliate of the General Partner
$59,000 and $47,000 at June 30, 1998 and June 30, 1997 respectively on
the management fee.
3. Sale of the Permanent Loan
On May 28, 1997, AP Nations LLC, a related party, acquired the
outstanding balance of the permanent loan together with contractual
interest due of $14,357,938 from the FDIC for $47,000,000. The accrued
interest was capitalized and consolidated with the principal balance
into a single note (the "Consolidated Note"). The Consolidated Note was
then restructured into two separate notes (the "First Note" and the
"Subordinated Note"). The First Note of $40,000,000, which is held by
Travelers Life Insurance Company, bears interest at Libor plus 180
basis points (7.47% at June 30, 1998) and is collateralized by the
office tower and retail space. The first note was assigned to Travelers
Life Insurance Company on May 30, 1997.
The Subordinate Note in the amount of $11,157,938, which is held by AP
Nations LLC, bears interest at 9.5% per annum plus 9.5% per annum on
the outstanding principal balance on the First Note less the amount of
interest due and payable with respect to the First Note. The
Subordinate Note is collateralized by the general partnership interest
in the operating partnerships.
In connection with the new loan agreement, an interest rate protection
agreement was entered into to provide the operating partnership with
funds should the First Note interest exceed 9.5% per annum.
The First Note and Subordinate Note combined require interest only
payments until July 1999 when principal payments of $48,660 per month
begin. The stated maturity date of the loans is May 30, 2001.
As a result of the restructuring, the operating partnerships recognized
an extraordinary gain of approximately $1,845,000 for financial
reporting purposes.
6
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis or Plan of Operation
This item should be read in conjunction with the financial statements
and other items contained elsewhere in the report.
Liquidity and Capital Resources
The matters discussed in this Form 10-QSB contain certain
forward-looking statements and involve risks and uncertainties
(including changing market conditions, competitive and regulatory
matters, etc.) The discussion of the Partnership's business and results
of operations, including forward-looking statements pertaining to such
matters, does not take into account the effects of any changes to the
Partnership's business and results of operations. Accordingly, actual
results could differ materially from those projected in the
forward-looking statements as a result of a number of factors,
including those identified herein.
The Registrant's sole assets are its approximately 88% interest in each
of Miami Tower Associates Limited Partnership ("Miami Tower") and Miami
Retail Associates Limited Partnership ("Miami Retail"). Miami Tower and
Miami Retail (collectively, the "Operating Partnerships") own a
37-story commercial office building located in Miami, Florida and a
ground floor retail arcade located in the same building, respectively
(the "Property"). The Operating Partnerships generate rental revenue
from the Property and are responsible for the Property's operating
expenses, administrative expenses, debt service and capital
improvements.
The Registrant's primary source of revenue is distributions from the
cash flow of the Operating Partnerships. In April 1998 the Operating
Partnerships made a distribution of $545,000 to the Registrant and
$78,000 to the minority partner. The Registrant used cash reserves to
satisfy administrative and other expenses during the six months ended
June 30, 1998. In addition, in April 1998 the Registrant distributed
$545,000 to its partners.
As of June 30, 1998, the Registrant had cash and cash equivalents of
$1,576,000. The Registrant's and the Operating Partnership's level of
liquidity, on a consolidated basis, decreased $1,132,000 during the six
months ended June 30, 1998, as compared to December 31, 1997. This
decrease was due to $1,350,000 of cash used in investing activities and
distributions of $632,000 which were partially offset by $841,000 in
cash provided by operating activities. Cash used by investing
activities consisted of $1,337,000 of additions to building and
improvements and $156,000 of deferred leasing commissions paid, offset
by a decrease in restricted cash of $143,000.
On May 28, 1997, AP Nations LLC, a related party, acquired the
outstanding balance of the permanent loan together with contractual
interest due of $14,357,938 from the FDIC for $47,000,000. The accrued
interest was capitalized and consolidated with the principal balance
into a single note (the "Consolidated Note"). The Consolidated Note was
then restructured into two separate notes (the "First Note" and the
"Subordinated Note"). The First Note of $40,000,000, which is held by
Travelers Life Insurance Company, bears interest at Libor plus 180
basis points (7.47% at June 30, 1998) and is collateralized by the
office tower and retail space. The first note was assigned to Travelers
Life Insurance Company on May 30, 1997.
The Subordinate Note in the amount of $11,157,938, which is held by AP
Nations LLC, bears interest at 9.5% per annum plus 9.5% per annum or
the outstanding principal balance on the First Note less the amount of
interest due and payable with respect to the First Note. The
Subordinate Note is collateralized by the general partnership interest
in the operating partnerships.
7
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Liquidity and Capital Resources (continued)
In connection with the new loan agreement, an interest rate protection
agreement was entered into to provide the operating partnership with
funds should the First Note interest exceed 9.5% per annum.
The First Note and Subordinate Note combined require interest only
payments until July 1999 when principal payments of $48,660 per month
begin. The stated maturity date of the loans is May 30, 2001.
As a result of the restructuring, the operating partnerships recognized
an extraordinary gain of approximately $1,845,000 for financial
reporting purposes.
The Registrant has invested and expects to continue to invest its
unrestricted cash in money market instruments until required for
operating purposes. The operating partnership had in capital
improvement, real estate taxes and security deposit escrows at June 30,
1998, $3,789,000; $1,225,000; and $348,000 respectively, held by the
mortgage lender. Restricted cash also includes a utility deposit of
$166,000. Therefore, at June 30, 1998, the Registrant has total
reserves of $5,528,000, which is expected to be sufficient to satisfy
foreseeable working capital requirements.
Results of Operations
The Net Operating Loss before minority interest of the Partnership and
Gain due to refinancing increased by $64,000 for the six months ended
June 30, 1998, as compared to the six months ended June 30, 1997 as a
result of a $367,000 increase in expenses which was partially offset by
a $303,000 increase in revenues. The Net Operating Loss before minority
interest of the Partnership and Gain due to refinancing increased by
$208,000 for the three months ended June 30, 1998, as compared to 1997,
as a result of a $327,000 increase in expenses which was partially
offset by a $119,000 increase in revenues
Revenues increased for the six months ended June 30, 1998, as compared
to 1997, due to increases in rental income of $352,000 and operating
expense reimbursements of $59,000, which was partially offset by a
decrease in interest income of $108,000. Rental revenues increased due
to an increase in rental rates from $22.92 per square foot to $23.15
per square foot and an increase in occupancy from 85% to 90%.
Expenses for the six months ended June 30, 1998, as compared to 1997,
increased due to increases in real estate taxes ($110,00), depreciation
and amortization ($77,000), interest expense ($40,000), utilities
($46,000), repairs and maintenance ($43,000) and management fees
($33,000). Real estate taxes increased due to an abatement filed for
and received for calendar 1997. Depreciation and amortization increased
because of the new additions in 1998. Interest expense increased for
financial reporting purposes as a result of the modification of the
Permanent Loan. Prior to the modification, interest expense was
reported using the effective interest method that resulted in a level
yield interest rate of 8.64%. The accrual interest rate under the
restated and amended loan is 9.5%. Utilities increased in 1998 due to
occupancy and the decrease in tenant overtime reimbursements. Repairs
and maintenance increased due to higher contract prices. All other
expense items remain relatively constant for the comparative periods.
8
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8K:
No Reports of Form 8-K were filed during the three months ended June
30, 1998.
9
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
SIGNATURES
- --------------------------------------------------------------------------------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
(Registrant)
BY: ONE INTERNATIONAL ASSOCIATES
LIMITED PARTNERSHIP,
ITS GENERAL PARTNER
BY: ONE INTERNATIONAL, INC.
ITS GENERAL PARTNER
BY: /S/Michael L. Ashner
--------------------
Michael L. Ashner
Chief Executive Officer
BY: /S/Edward V. Williams
--------------------
Edward V. Williams
Chief Financial Officer
DATED: August 12, 1998
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from unaudited financial
statements for the six month period ending
June 30, 1998 and is qualified in its
entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 7,104,000
<SECURITIES> 0
<RECEIVABLES> 4,705,000
<ALLOWANCES> (20,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 60,528,000
<DEPRECIATION> (12,843,000)
<TOTAL-ASSETS> 61,089,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 7,198,000
<TOTAL-LIABILITY-AND-EQUITY> 61,089,000
<SALES> 6,328,000
<TOTAL-REVENUES> 6,328,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,967,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,430,000
<INCOME-PRETAX> (1,063,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,063,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,063,000)
<EPS-PRIMARY> (3,544.44)
<EPS-DILUTED> (3,544.44)
</TABLE>
